Yes, an existing external drive can usually hold a new image alongside other files, provided the file system, permissions, and free space are suitable. You do not have to format a healthy destination merely because it contains data. However, a backup written to the same physical disk as Windows will not protect against disk failure.
Step 1. In File Explorer, note the destination drive letter, file system, free space, and existing folders. Estimate space using the source system's used capacity; leave additional room for image metadata and future versions.
Step 2. Open a few existing files on the destination and copy a small test file there, then delete only that test copy. If the drive disconnects or reports errors, use a different destination. Do not delete old backups until the new one is verified.
Step 3. If the destination is a shared/network drive, confirm credentials and that the share remains available while the PC sleeps. Avoid saving the only backup to a second partition of the same internal disk.
On Windows versions that still provide Backup and Restore (Windows 7), open Control Panel, choose Create a system image, select a supported external or network destination, review the disks to be included, and start the image. The legacy interface may reject some destination types or file systems; do not reformat a drive containing valuable data to satisfy a wizard without first protecting that data elsewhere. Windows Backup/OneDrive file sync is not the same as a bare-metal system image.
Step 1. Open Backup and Recovery > System Backup. Verify that the Windows system and boot partitions are selected automatically; do not substitute a file backup if you need a restorable system image.

Step 2. Select a folder on the existing external drive as the destination. Recheck its letter and available space. Existing unrelated files should remain in place; the new image is written as a separate backup task.

Step 3. Review the source and destination, click Proceed, and wait until completion. In the destination folder or Qiling task list, confirm that the new image exists. Open the restore workflow far enough to see that the image is recognized, but do not start a restore merely to test it.

Use an existing drive if it is healthy and has enough free space; no format is needed. Keep the image on separate physical storage and verify that it is recognized before relying on it.